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TOPIC: A Black- or White Knight to emerge?

A Black- or White Knight to emerge? 08 Jan 2019 01:14 #12467

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If you look at the three apparent options that Cytori still has available, to fulfil its obligations towards Oxford et all within a timespan of a few weeks i.e. January 31 2019, you realize that the resolution is really forthcoming for the Company that most of us have been following for quite some time.

We have a lot to think about-

first- the emergence of Swiss money i.e. equity from large institutions at the beginning of 2018.
second- that in the past certain folks have been interested in technology licenses, but never ever anything came to fruition in that field, despite many many evidences from private investigators that the technology works.
third- looking at other SC Companies in particular and business in general- Chinese money is being pumped into many sectors and countries and available also for the SC industry.

having written all that- below are those options, we are looking at:

The Amendment requires that the Company achieve one of the following by January 31, 2019:
1. enter into an asset sale agreement with a minimum unrestricted net cash proceeds to the Company of $4.0 million;
2. enter into a binding agreement for the issuance and sale of its equity securities or unsecured convertible subordinated debt which would result in unrestricted gross cash proceeds of not less than $7.5 million; or
3. enter into a merger agreement pursuant to which the obligations under the Loan Agreement would be paid down to a level satisfactory to Oxford and the Lenders.


Clearly - in theory- the first option would be the worst one, since it means selling an asset under the worst possible negotiation position and since no asset (of the few available) has been developed to any stage that it provides a meaningful return on investment. That this option is listed as option # 1 does not inspire confidence in an "happy ending"

The second option- a binding agreement for issuance of equity or subordinated convertibles would definitely be preferred over the first one. However- since a Rights Offering cannot be conducted on short notice, an equity sale to a third party would be in conflict with Cytori´s by-laws (the 10% max. equity stake), but convertible debt - the first option in Amendment # 3- certainly the best of them all. Note- the conversion ratio does not have to be related to the present PPS- here a white knight would be the saviour, a black night - the killing blow most likely in respect of the determination of the conversion price. Good conditions - i.e. the white knight version- definitely would inspire a lot of confidence in the viability of the business model.

Leaves the last- third- option- for me the most likely one. Most likely either of Swiss or Chinese origin. The black or white knight possibilities are even more evident here. Without wanting to go into great detail here- a merger whereby Cytori stays "on top and listed" - the white knight one- would benefit shareholders greatly. A reverse merger whereby Cytori gets swallowed- i.e the black one- would be a disaster and most likely a virtual total loss for shareholders despite all promises the technology still entails.

We will know soon enough, but this water-belly torture has to stop someway or another please.

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Board moderator and Site-owner. I still regret the day I started analysing the prospects of MacroPore (now Cytori) back in 2004- a left-over from the tech-bubble at that time from the century change in my portfolio- and became addicted to Cytori´s fat cell technology. :cry:

A Black- or White Knight to emerge? 08 Jan 2019 02:28 #12468

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January can be such a long month as it is.
Coming at it from a slightly different angle, I would think Hedrick would be pushing for the option that has the best chance of saving his own skin....in so much they really ever had much control of their own destiny anyway.


Market cap here was once a couple hundred million....now we quibble over if we get a few million from this source or that source and if there is even a company when its done.

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A Black- or White Knight to emerge? 08 Jan 2019 03:19 #12469

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myownhedgefund wrote: January can be such a long month as it is.
Coming at it from a slightly different angle, I would think Hedrick would be pushing for the option that has the best chance of saving his own skin....in so much they really ever had much control of their own destiny anyway.


Market cap here was once a couple hundred million....now we quibble over if we get a few million from this source or that source and if there is even a company when its done.


Yes- one of America´s favourite pastime´s - destruction of early promising technology and development of its remnants by Big Capital most likely in a diluted fashion, so it does not harm established pill revenues.

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A Black- or White Knight to emerge? 08 Jan 2019 05:11 #12470

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fas wrote: If you look at the three apparent options that Cytori still has available, to fulfil its obligations towards Oxford et all within a timespan of a few weeks i.e. January 31 2019, you realize that the resolution is really forthcoming for the Company that most of us have been following for quite some time.

We have a lot to think about-

first- the emergence of Swiss money i.e. equity from large institutions at the beginning of 2018.
second- that in the past certain folks have been interested in technology licenses, but never ever anything came to fruition in that field, despite many many evidences from private investigators that the technology works.
third- looking at other SC Companies in particular and business in general- Chinese money is being pumped into many sectors and countries and available also for the SC industry.

having written all that- below are those options, we are looking at:

The Amendment requires that the Company achieve one of the following by January 31, 2019:
1. enter into an asset sale agreement with a minimum unrestricted net cash proceeds to the Company of $4.0 million;
2. enter into a binding agreement for the issuance and sale of its equity securities or unsecured convertible subordinated debt which would result in unrestricted gross cash proceeds of not less than $7.5 million; or
3. enter into a merger agreement pursuant to which the obligations under the Loan Agreement would be paid down to a level satisfactory to Oxford and the Lenders.


Clearly - in theory- the first option would be the worst one, since it means selling an asset under the worst possible negotiation position and since no asset (of the few available) has been developed to any stage that it provides a meaningful return on investment. That this option is listed as option # 1 does not inspire confidence in an "happy ending"

The second option- a binding agreement for issuance of equity or subordinated convertibles would definitely be preferred over the first one. However- since a Rights Offering cannot be conducted on short notice, an equity sale to a third party would be in conflict with Cytori´s by-laws (the 10% max. equity stake), but convertible debt - the first option in Amendment # 3- certainly the best of them all. Note- the conversion ratio does not have to be related to the present PPS- here a white knight would be the saviour, a black night - the killing blow most likely in respect of the determination of the conversion price. Good conditions - i.e. the white knight version- definitely would inspire a lot of confidence in the viability of the business model.

Leaves the last- third- option- for me the most likely one. Most likely either of Swiss or Chinese origin. The black or white knight possibilities are even more evident here. Without wanting to go into great detail here- a merger whereby Cytori stays "on top and listed" - the white knight one- would benefit shareholders greatly. A reverse merger whereby Cytori gets swallowed- i.e the black one- would be a disaster and most likely a virtual total loss for shareholders despite all promises the technology still entails.

We will know soon enough, but this water-belly torture has to stop someway or another please.

/

Fas, I think that your selected best option above is a dream that is not going to happen - absent that one, I think that you have the remaining priorities in the wrong order - the sale of some assets or a licensing agreement would be the most preferable course of action - no more issuance of DILUTIVE securities!

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A Black- or White Knight to emerge? 08 Jan 2019 08:30 #12471

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Rodney-

You would like to sell the substance of the Company for an apple and an egg? Surely that would not create shareholder value but would even decrease it, since the resulting money will be spent- i.e. redemption of loan + operating costs in no-time. Plus they do not have the time for that- January 31 is very very soon. :grin: :grin:

I did not mention dilution anywhere- a subordinated loan will not dilute for the time being- all depends on the future conversion price if it is ok or not. A merger ditto. Boy- you are a finance expert all right, but than again if you think so- that is fine. :cool:

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Board moderator and Site-owner. I still regret the day I started analysing the prospects of MacroPore (now Cytori) back in 2004- a left-over from the tech-bubble at that time from the century change in my portfolio- and became addicted to Cytori´s fat cell technology. :cry:

A Black- or White Knight to emerge? 08 Jan 2019 09:03 #12472

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fas wrote: Rodney-

You would like to sell the substance of the Company for an apple and an egg? Surely that would not create shareholder value but would even decrease it, since the resulting money will be spent- i.e. redemption of loan + operating costs in no-time. Plus they do not have the time for that- January 31 is very very soon. :grin: :grin:

I did not mention dilution anywhere- a subordinated loan will not dilute for the time being- all depends on the future conversion price if it is ok or not. A merger ditto. Boy- you are a finance expert all right, but than again if you think so- that is fine. :cool:

/

Fas, no need to get nasty - people do not always agree - on the bright side, I think that we see NEWS this week.

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A Black- or White Knight to emerge? 08 Jan 2019 09:39 #12473

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Agree Fas, the $4 million or so would likely do little.
Do you think someone would really do a convertible with Oxford in the picture ?
I still think that if such a path were to happen it makes more sense to have them out of the picture and thus provide a deal structure that not only give some funding to CYTX but also gets Oxford out by paying off most of the outstanding balance and Oxford agreeing to accept that and walk away. If I take a que from CYTX history....They are looking for 6 months of funding and Oxford relief.
Just speculating of course but thoughts ?

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A Black- or White Knight to emerge? 08 Jan 2019 10:13 #12474

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Hedge- yes. why not? This is really not "big" money -max. 13 Mio.

Kind of "restructuring" the loan until conservatively calculated, the merged Company would be cash-flow positive- maybe that is why Oxford agreed to

"enter into a merger agreement pursuant to which the obligations under the Loan Agreement would be paid down to a level satisfactory to Oxford and the Lenders."


everything would be acceptable I guess.

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Board moderator and Site-owner. I still regret the day I started analysing the prospects of MacroPore (now Cytori) back in 2004- a left-over from the tech-bubble at that time from the century change in my portfolio- and became addicted to Cytori´s fat cell technology. :cry:

A Black- or White Knight to emerge? 08 Jan 2019 12:09 #12475

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Options 4 and 5 are more likely than the first 3, IMHO:

4) Oxford, fearing a bankruptcy, extends again.

5) Cytori waives the white flag and declares bankruptcy.

There will be no White Knight, that's for sure. Autologous is not where its at. The Swiss, were nothing more than off shore versions of Sabby, IMHO. Just in it for the backdoor U/W play and spread.

BTW, are there still any make whole provisions to the previous financiers to get a retroactive lower price for new shares issued at a lower price than they paid or have those provisions expired?

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A Black- or White Knight to emerge? 08 Jan 2019 13:49 #12476

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Wall Street Titan wrote: Options 4 and 5 are more likely than the first 3, IMHO:

4) Oxford, fearing a bankruptcy, extends again.

5) Cytori waives the white flag and declares bankruptcy.

There will be no White Knight, that's for sure. Autologous is not where its at. The Swiss, were nothing more than off shore versions of Sabby, IMHO. Just in it for the backdoor U/W play and spread.

BTW, are there still any make whole provisions to the previous financiers to get a retroactive lower price for new shares issued at a lower price than they paid or have those provisions expired?

/

On a different subject, namely ATHX, how were you so far off the mark timing-wise in your last SA article??? Not trying to be combative, but you seemed so sure in the article.

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A Black- or White Knight to emerge? 08 Jan 2019 14:12 #12477

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You read the article right? The logic was sound, wasn't it? It just didn't pan out. Move on and hope they come through with good ARDS results. They have been downplaying showing efficacy due to the small enrollment size of the trial on conference calls but lets hope there is enough good in the results. Maybe this time they surprise on the upside. Do your own DD.

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A Black- or White Knight to emerge? 08 Jan 2019 14:15 #12478

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WST
I would view such a conversion deal as a back door black knight anyway.
Said black knight would still want some form of payment on the loan and the conversion would be absolutely choking.
It does save Hedrick et al and gives them some more time to advance the cancer product which I have always felt needed to be further along to get a deal done.

As far as the "make whole provision".....good point and totally forgot about that but everything is negotiable imho.

Otherwise its BK.

As I said for oh so long....Zero was always a possibility.

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A Black- or White Knight to emerge? 08 Jan 2019 15:10 #12479

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myownhedgefund wrote: WST
I would view such a conversion deal as a back door black knight anyway.
Said black knight would still want some form of payment on the loan and the conversion would be absolutely choking.
It does save Hedrick et al and gives them some more time to advance the cancer product which I have always felt needed to be further along to get a deal done.

As far as the "make whole provision".....good point and totally forgot about that but everything is negotiable imho.

Otherwise its BK.

As I said for oh so long....Zero was always a possibility.

/

Regarding your last sentence - based on the dollar investment of most of the CYTX diehards, we are already essentially at zero - however, I disagree that BK is likely - greater chance of $1 than zero a few months from now - JMHO.

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A Black- or White Knight to emerge? 08 Jan 2019 15:24 #12480

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***greater chance of $1 than zero a few months from now***

Maybe, maybe not. I say doubtful you see $1, who knows about zero. Certainly you could have gotten $4.70 two summers ago when scleroderma trial failed.

As Fas said, we don't have long to wait.

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A Black- or White Knight to emerge? 08 Jan 2019 15:30 #12481

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Hedge, if these make whole provisions do still exist, there is no incentive for the holder to negotiate anything. They would be entitled to free money or shares in a legally binding agreement. They could care less about Cytori, Oxford, or existing shareholders. I see this as an additional and potentially expensive complication. Who knows, maybe the one month extension was enough to get past any of these make whole agreements if they still existed on December 31st. Anyone considering investing or staying in with any level of serious investment should know the answer to this question. I've been out for a while so I won't be doing the DD. Someone should ask Tiago.

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A Black- or White Knight to emerge? 08 Jan 2019 15:53 #12482

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Wall Street Titan wrote: Hedge, if these make whole provisions do still exist, there is no incentive for the holder to negotiate anything. They would be entitled to free money or shares in a legally binding agreement. They could care less about Cytori, Oxford, or existing shareholders. I see this as an additional and potentially expensive complication. Who knows, maybe the one month extension was enough to get past any of these make whole agreements if they still existed on December 31st. Anyone considering investing or staying in with any level of serious investment should know the answer to this question. I've been out for a while so I won't be doing the DD. Someone should ask Tiago.


The "make whole" provisions are the least of CYTX's current problems!!!!

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A Black- or White Knight to emerge? 08 Jan 2019 16:19 #12483

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secfilings.nasdaq.com/filingFrameset.asp?FilingID=12874013&RcvdDate=7/25/2018&CoName=CYTORI%20THERAPEUTICS%2C%20INC.&FormType=8-K&View=html

Item 5.03 mention the provision referred to by WST.
Can it be worked around ? I'll leave that for others. Asking Tiago is a good idea but agree for others who have bigger stakes.

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A Black- or White Knight to emerge? 09 Jan 2019 09:47 #12484

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Wow, surprised there was no time limit on that provision. Shares trading at less than half of that conversion price of $0.7986. That means more than 100% dilution on PFD before they do anything in the event that they are able to issue more shares in any form. Cytori is behind the eight ball with that provision and the sharks will bite off as much as they can chew. Consider that it is very likely Convertible Pfd holders are already short the stock as they were not long term investors from the start, IMHO, just backdoor U/W's.

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A Black- or White Knight to emerge? 09 Jan 2019 09:49 #12485

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Hedge- what is there to ask? Of course it is still valid, since it changed the articles/bylaws of the Company and if they do not apply any longer than that must be published.
Anyway- it just mentions that Preferred C holders get treated the same as if they owned common in case of a business combination or the like and a lower conversion price in case of a new RO, which is rather unlikely.

It smells to me, that something has been in the planning for a long time and is coming to a conclusion- most likely a business combination and a concurrent move to new facilities.

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A Black- or White Knight to emerge? 09 Jan 2019 12:04 #12486

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Fas
To me, I agree, there is nothing to ask however I also agree with WST that for those who want clarification Tiago is the best source.
Whether this clause existed or not I don't think existing shareholders get much anyway.

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